Pet Trusts: Trusts for Your Pets
A recent article "Survey: Almost half of Ohio pet owners spend more on pets than partners for Christmas," got us thinking about pet trusts. It's a topic we haven't posted about yet and at Joseph L. Motta Co., we have had the pleasure of working on several pet trusts over the years. So what are pet trusts and why would a pet owner work with an estate planning attorney to prepare one? Well, as the survey reveals, 40% of the Ohio pet owners questioned (2,500 pet owners), will be spending more on their pet this Christmas than on their significant other, so it is clear that we love our pets and consider them part of the family, but how can you ensure your pet will be cared for once you have died?
A Will is Not Sufficient to Ensure Obligation for Pet Care
One option is to create a pet trust. While you can give directions in your will to leave your pet to a caretaker, there is no guarantee that the caretaker will continue to care for your pet. A pet trust can provide a little more security for the pet because a third party -- the trustee -- is obligated to ensure the pet is cared for.
A trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a "trustee," holds legal title to property for another person, called a "beneficiary." With a pet trust, the trustee makes payments on a regular basis to your pet's caregiver and pays for your pet's needs as they come up.
The federal tax code does not recognize a pet as a beneficiary of a trust. However, all 50 states and the District of Columbia have laws allowing pet trusts. Another option is to set up a traditional trust and place the pet in the trust along with the funds. The pet's caregiver can be named the beneficiary.
The first step is to contact your local estate planning attorney. Regardless of what type of trust you use, the following are some elements the trust should include:
1) Pet Trusts Should Name a Caretaker.
The pet trust will need to name a caretaker who will be willing and able to care for your pet. The caretaker should be someone who is comfortable with your animal.
2) A Good Pet Trust Includes Care Instructions.
The pet trust should include specific instructions on all aspects of the pet's care, including the brand of food, activities the pet enjoys, and the preferred veterinarian.
3) Pet Trust Requires Necessary Funds.
Your local estate planning attorney can help determine what amount of money may be warranted. The health of the pet should be taken into consideration, as well as future health conditions the pet could suffer from in its lifetime. The care of a pet can get costly which is why the amount of money necessary to fund the trust depends on the individual animal. Typically, you can leave the money to the trust in your will. Be warned that under most pet trust laws, the court can reduce the amount of caretaking funds to what it deems is reasonable for the care of the pet.
For more about making pets a part of your estate plan, click here for a fact sheet from the Humane Society.
Pet Trusts Could Be a Part of Your Estate Plan
At Joseph L. Motta, elder law and estate planning firm in Avon Lake, OH, we understand how important pets can be, especially as they provide much needed companionship to aging adults. So don't let the fear of a pet out-living you deter you from the love and company of a furry friend. With our experience including pet trusts as part of your estate plan, you can be at peace that your companion will be well taken care of. Call 440-930-2826 to schedule a free consultation.